Subsidies

By this time, if you follow politics at all, chances are you’ve heard a lot about the farm bill. Passed Tuesday, this bill represents nearly $1 trillion in new spending, with typical promises for paltry reform over the next decade.

At risk of presumption, the problems with the farm portion are rather obvious. It’s no surprise that 85% of economists from across the ideological spectrum oppose farm subsidies. It seems commonly accepted that the “farm bill” long ago ceased to be a temporary relief for struggling family farmers and has instead become a hefty bonus check for some of the biggest corporate agriculture. For example, the richest farmers get the most subsidies, and just three firms received the most in sugar subsidies last year. And Tuesday’s bill did little to address these issues.

A program so misguided is easy to attack. But unfortunately, the farm portion is a very small part of the “farm” bill. And the other part backs people who want to save the next generation from massive debt into quite a tough corner.

The statement was made before a crowd in Phoenix, Arizona while President Obama outlined the first four principles of his new plan to govern the housing reform.

The new plan includes facilitating credit for what the president calls qualified buyers, who “want to get a mortgage but keep getting rejected by the banks,” and offering a solution to “address the uneven recovery” by restoring rundown homes and vacant property.

While summarizing his government-run plans to restore the economy by stimulating the housing market, which is nothing out of the ordinary when it comes to this administration’s policies, President Obama reassured Arizonans that steps must be taken to avoid yet another bubble.

The solution, President Obama says, is to do precisely what he wants to do with Obamacare, which is to set up ”clear rules for insurance companies to protect consumers,” thus making housing more affordable. He claims that his plan would offer a market-based solution still under the government’s watch that would ensure home value would go up for everybody.

Whenever people call for cutting the military budget, the usual response goes something like ”How can you keep the Army from getting the equipment it needs to fight wars?” Well, the problem with that response is highlighted today by this story from ABC:

Lawmakers from both parties have devoted nearly half a billion dollars in taxpayer money over the past two years to build improved versions of the 70-ton Abrams.

But senior Army officials have said repeatedly, “No thanks.”

It’s the inverse of the federal budget world these days, in which automatic spending cuts are leaving sought-after pet programs struggling or unpaid altogether. Republicans and Democrats for years have fought so bitterly that lawmaking in Washington ground to a near-halt.

Yet in the case of the Abrams tank, there’s a bipartisan push to spend an extra $436 million on a weapon the experts explicitly say is not needed.

“If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told The Associated Press this past week.

Why are the tank dollars still flowing? Politics.

Keeping the Abrams production line rolling protects businesses and good paying jobs in congressional districts where the tank’s many suppliers are located.

If there’s a home of the Abrams, it’s politically important Ohio. The nation’s only tank plant is in Lima. So it’s no coincidence that the champions for more tanks are Rep. Jim Jordan and Sen. Rob Portman, two of Capitol’s Hill most prominent deficit hawks, as well as Democratic Sen. Sherrod Brown. They said their support is rooted in protecting national security, not in pork-barrel politics.

I don’t like to make political endorsements and, on principle, I certainly don’t discuss my vote before an election (the protection a secret ballot offers me from harassment and intimidation only works if I keep my preference a secret). I was stunned to read in an email yesterday, “I had no idea high-information, intelligent undecided voters even existed!” You know, as if the choice between an underwhelming incumbent president, an underwhelming challenger, a list of names with no mathematical chance to win, and not voting at all is an easy one to make. If your only goal is to beat the incumbent, then your decision is easier than mine. I, however, don’t only want to beat the incumbent; I want to elect a president worthy of the exercise of one of my most sacred rights, the right to vote.

I know we’re focused pretty intensely on the elections, which are only two weeks away, but we always need to focus as well on underlying principles and concepts that drive our economy and our government. Elections come and go; this stuff is forever. In that vein, you really need to take a look at a new paper from the Mercatus Center at George Mason University, by Randall Holcombe:

Crony capitalism describes an economic system in which the profitability of firms in a market economy is dependent on political connections. The term has been used in the popular press but rarely appears in academic literature. However, there has been a substantial amount of academic research on various components that, when aggregated, describe crony capitalism. This literature shows that crony capitalism exists only because those in government are in a position to target benefits to their cronies, and have an incentive to do so, because they get benefits in return. The ability to target those benefits is a result of the spending and regulatory power of government, so big government causes cronyism. One remedy often suggested for cronyism is more government regulation and oversight of the economy, but this remedy misunderstands the cause of cronyism. The substantial and well-established economic literature on the components of crony capitalism shows that big government is the cause of crony capitalism, not the solution.

By “crony capitalism,” of course, he refers to lobbyists, and big business using those lobbyists to get more power and take more wealth away from the public. It’s the reason we had Occupy Wall Street, and why many folks still cry out for “regulation” to “rein in” big business and the big banks.

There’s a pervasive myth floating around the progressive left that pro-market advocacy necessarily means pro-business advocacy (and, by extension, anti-poor people advocacy). That is, as I said, categorically a myth, but that doesn’t mean people don’t believe it — they do. Kudos are due many times over to the Washington Examiner’s Tim Carney for doing yeoman’s work to try to dispel these myths, like this thorough and merciless rebuttal to Anna Palmer’s joke of a POLITICO piece on a supposed resurgence of corporate lobbyist influence in the White House if Mitt Romney wins the election, as if there’s nothing to see in the Barack Obama White House:

By that point in the column, Carney had already identified six registered lobbyists working in the administration; by the end of the thrashing, he identifies a total fifty-five registered lobbyists working in the White House.

The case for Mr. Ryan is that he best exemplifies the nature and stakes of this election. More than any other politician, the House Budget Chairman has defined those stakes well as a generational choice about the role of government and whether America will once again become a growth economy or sink into interest-group dominated decline.

Against the advice of every Beltway bedwetter, he has put entitlement reform at the center of the public agenda—before it becomes a crisis that requires savage cuts. And he has done so as part of a larger vision that stresses tax reform for faster growth, spending restraint to prevent a Greek-like budget fate, and a Jack Kemp-like belief in opportunity for all. He represents the GOP’s new generation of reformers that includes such Governors as Louisiana’s Bobby Jindal and New Jersey’s Chris Christie.

As important, Mr. Ryan can make his case in a reasonable and unthreatening way. He doesn’t get mad, or at least he doesn’t show it. Like Reagan, he has a basic cheerfulness and Midwestern equanimity.

Today, I launched a new politics/sports politics called The Sport of Politics. Episode 1 talks a great deal about a battle in the Arizona desert between the Phoenix Coyotes and the libertarian think tank Goldwater Institute. Joining me to talk about this fight, as well as the future of hockey in non-traditional hockey towns and the prospects for the Nashville Predators in the post-Ryan Suter era is UL contributor George Scoville!

It’s official: the New York Times’ resident Nobel Prize Laureate/Loony is delusional. He wrote on his blog Monday about “how right he was”:

We’re coming up on the second anniversary of my piece “Myths of Austerity“, in which I tried to knock down the simply insane conventional wisdom then gelling among Very Serious People. Intellectually it was, I think I can say without false modesty, a huge win; I (and those of like mind) have been right about everything.

But I had no success in deflecting the terrible wrong turn in policy. Moreover, as far as I can tell none of the people responsible for that wrong turn has paid any price, not even in reputation; they’re still regarded as Very Serious, treated with great deference. And the political tendency behind that terrible economic analysis has at least a 50% chance of triumphing in America.

Oh well.

“Oh well” is right.

His first problem is that he says he has “been right about everything.” When one looks at the stimulus programs that have been enacted since this recession began, and the high unemployment that has persisted, the evidence is blatantly clear: Krugman is an idiot.

His second problem is his statement that “I had no success in deflecting the terrible wrong turn in policy.” Um, lest I am living on a different worldline than Krugman, the man’s main policy prescription has been stimulus, and we’ve had a lot of it:

What all the GOP candidates are after, are so-called ‘delegates.’Elected officials that will broker the convention of either party this fall. Officials are parcelled by the amount of votes, the candidates receive in the primary.

During Michigan’s primary recently, for instance, there were 30 official delegates, state-wide. Two were ‘at-large’ candidates, which meant they could be assigned individually to any winning candidate. The other 28 were ‘proportional’ ones, alotted through 14 congressional districts. During the push for the nominations in Michigan last night, Mitt Romney and Rick Santorum spent millions of dollars to influence the voting population; with TV ads, pamphlets, media, interviews, rallies, stickers, and much more. Michigan’s grand sum of politcal expenditure was near six million bucks.

Delegates are what really counts at the GOP convention. What looks to be happening, is that no clear winner will come out victorious. There’s a righteous number: 1444 delegates will win any nominee the victory-nod of the Republican National Committee. Nationwide, 2169 delegates are extended for contestation, until the RNC celebration in Tampa, Florida. From the RN Committee, an additional 117 delegates are added into the mix, ostensibly to keep debate lively and clear-up dead locks. So what appears, on first looks, to be a rather hot-headed and fast paced Republican rocket-launch to the RNC, is more like a jammed or misfired pistol in a duel.

Momentarily, Mitt Romney is in the lead, with 167 total delegates. Rick Santorum is second with roughly half, at 87. Newt Gingrich won only one state and has 32, while Ron Paul has 19 carefully collected delegations. The count may reshuffle at any moment, since constitutionalism and populism together, ring alarm-bells in states such as Arkansas, Kentucky, Tennessee, Texas, Oklahoma and New Mexico.